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prisoha [69]
3 years ago
6

A notice is published stating that RMO 5% convertible preferred stock will be called at $60 per share. The preferred is converti

ble into 1/2 share of common and is selling in the market at $56 per share. RMO common stock is selling in the market at $110 per share. After the notice appears, the price of the preferred stock will most likely trade in the market at: _________.
Business
1 answer:
dybincka [34]3 years ago
6 0

Answer: d. A price near $60

Explanation:

The Preferred Stock was selling at $56 then a notice was circulated that RMO would be calling the stock at a price of $60.

This $60 is more than the current $56 and so this will need to reflect in the price of the stock. The adjustment will cause the Preferred stock to start trading near $60 as traders will seek to take advantage of the impending call by buying at a lower price and thus making a bit of profit when the stock is called at $60. The market will adjust to this because the Preferred stock will be perceived as undervalued. A price closer to the Call price will therefore become the new price to properly value the stock.

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Jorge should provide feedback from all around the employee.

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3 years ago
Read 2 more answers
At an output level of 59,000 units, you calculate that the degree of operating leverage is 3.3. The output rises to 64,000 units
11Alexandr11 [23.1K]

Answer: Percentage change OCF = 27.96%.

Explanation:

Given that,

Output level = 59,000 units

Degree of operating leverage = 3.3

Output rises to 64,000 units,

Degree of Leverage = \frac{Percentage\ change\ in\ Operating\ cash\ Flow}{Percentage\ change\ in\ Quantity}

Percentage change OCF = Degree of Leverage × Percentage change in Quantity

= 3.3 \times \frac{64000-59000}{59000} \times 100

= 27.96%

5 0
3 years ago
Consider a city of 200 people (100 rich and 100 poor) and two neighborhoods (100 people in each). Both groups generally prefer t
Mekhanik [1.2K]

Answer:

Explanation:

Step 1. Given information.

  • City of 200 people
  • 100 rich, 100 poor.

Step 2. Formulas needed to solve the exercise.

  • P(poor) = 0.9x^2
  • P(rich)= 35x-0.1x^2

Step 3. Calculation and step 4. Solution.

P(poor) = p (rich)

0.9x2 = 35x - 0.1x2

1x2 = 35x

x = 35

x is the percentage of rich above 50%, thus there are 35% rich people above 50%.

P (poor) = 1102.5

P (rich) = 1102.5

The equilibrium premium is $1,102.5

3 0
3 years ago
The Razooks Company, which manufactures office equipment, is ready to introduce a new line of portable copiers. The following co
alexandr402 [8]

Answer:

Results are below.

Explanation:

Giving the following information:

Variable manufacturing cost $195

Applied fixed manufacturing cost 105

Variable selling and administrative cost 75

Allocated fixed selling and administrative cost 90

<u>1)</u>

Unitary variable cost= $195

Selling price= 195*2.1

Selling price= $409.5

<u>2)</u>

Total variable cost= 195 + 75= $270

Selling price= 270*1.65

Selling price= $445.5

<u>3)</u>

<u>The absorption costing method includes all costs related to production, both fixed and variable.</u> The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.

Total absorption cost= 195 + 105= $300

Selling price= 300*1.2

Selling price= $360

8 0
2 years ago
Discounted-cash-flow analysis focuses primarily on:___.
IgorLugansk [536]

The discounted cash-flow analysis focuses primarily on the timing of cash flows.

Timing and Cash Flow

Timing is when you get your money compared to when you lose it. And it's just as important as how much money you have each month. Mortgage payments are a good example. Most likely, the mortgage will be debited from your account on the 12th of the month.

Suppose a project pays for itself during the life of the project. Increasing the size of the initial cash inflow shortens the payback period, all else being held constant.

Learn more about cash flows here: brainly.com/question/24179665

#SPJ4

5 0
1 year ago
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